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Online Real Estate Agencies and their Impact on the Housing Market

Author

Listed:
  • Cigdem Gedikli

    (Swansea University)

  • Robert Hill

    (University of Graz)

  • Oleksandr Talavera

    (University of Birmingham)

  • Okan Yilmaz

    (Swansea University)

Abstract

Online platforms have transformed many markets, as evidenced by the rise of firms such as Amazon, Uber, and Airbnb. However, the recent emergence of online real estate agencies has not yet received much attention. We investigate the impact of online agencies on the housing market. Our dataset consists of 1,274,792 properties in England and Wales, for which we have matched Zoopla listings with actual transactions from the Land Registry. Using an IV approach, we find that time on market is shorter by about 80 days and the sale-list price ratio is smaller by about 2.4% for properties listed with online agencies. These findings, combined with an average fee of less than one-third of that charged by traditional agencies, explain why online agencies have rapidly gained market share. Their share has risen particularly for properties in the mid-price range and in regions with younger demographics. Also, we find that the rise of online agencies has caused traditional agencies to change their behavior – time on market and the sale-list price ratio are lower for traditional agencies in regions with a higher share of online agencies.

Suggested Citation

  • Cigdem Gedikli & Robert Hill & Oleksandr Talavera & Okan Yilmaz, 2025. "Online Real Estate Agencies and their Impact on the Housing Market," Discussion Papers 25-01, Department of Economics, University of Birmingham.
    • Handle: RePEc:bir:birmec:25-01
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    File URL: https://repec.cal.bham.ac.uk/pdf/25-01.pdf
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    More about this item

    Keywords

    Online platforms; Digital disruption; Diffusion of new technologies; Real estate market; Time on market; Sale-list price ratio;
    All these keywords.

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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